Credit cards,when used properly, are convenient and a budgeting tool. If abused, though, credit cards can be the start of a years-long nightmare and unbelievable stress. Most households that have credit cards have and use an average of eight cards.Speaking of credit debt reasons, there are various factors that may have a dramatic impact on the financial situation. The following is the causes of credit card debts:
1. Poor money management
There are too many people who cannot possibly find an equilibrium between their expenses and income. A sudden reduction of income cause people fall into credit debts. Meanwhile, they keep on spending as much as they got used to regardless of the reduced income.
2. The lack of financial planning
There is a lot of people lack of financial planning skills. When they are buying something, they do not plan properly whether they are afford to buy it. Sometimes, they are spending money on an unnecessary stuff. If they are lack of money, they will use credit cards for purchasing. At the end of the month, they cannot pay for the bill for what they purchased.
3. Gambling
Gambling becomes part of entertainments in people’s life nowadays. People are addicting on gambling and makes it becomes more difficult when they want to stop it. Thus, it will lead to financial problem when people tend to use credit cards for gambling purposes.
We all know that if we want to gain a better health, we have to eat right, exercise regularly, and get a good night’s sleep. When talk about financial, it is not much different with it. By taking a few steps of prevention, it will free you to a live of opportunity rather than of difficulty.
1. Manage your finances
It is to determine your monthly income and expenses. Besides, you can make a saving so that you would not spend the money on unnecessary things. Write down what are
necessary items for your daily life and avoid buying some luxury items that are unnecessary.2. Use it like cash and not a credit card
In one sense, you need to use your credit card like cash by paying balance in full each month. Do not think that having a credit card will enable you to spend the money unlimited. You have to remember that you are using the ‘future money’ and you need to repay it in the future.
3. Keep the low credit limit
A low credit limit will help you to prevent for spending much. Try not to increase your credit limit if the bank asks you to do so. By doing so, you can avoid for spending out of the area that you can afford.
References:
0 comments:
Post a Comment